Ayar Labs, a provider of co-packaged optics solutions for AI scale-up, announced the closing of a $500 million Series E funding round led by Neuberger Berman. The financing brings the company’s total funding to $870 million and values the business at $3.75 billion.
The round included new investors Alchip Technologies, ARK Invest, Insight Partners, MediaTek, Qatar Investment Authority (QIA), Sequoia Global Equities, and 1789 Capital. They join existing financial backers Advent Global Opportunities, Boardman Bay Capital Management, IAG Capital Partners, Light Street Capital, and Playground Global, along with strategic investors AMD Ventures and NVIDIA.
Based in San Jose, California, Ayar Labs develops co-packaged optics technology designed to replace bandwidth-limited copper interconnects with optical connectivity in AI infrastructure. The company said it will use the proceeds to scale high-volume production and expand test capacity to accelerate deployment of its CPO solution. The funding will also support global expansion, including operations at its new Hsinchu, Taiwan office, and further strengthen ecosystem partnerships.
Ayar Labs’ AI scale-up CPO solution is built around its TeraPHY optical engine, which integrates into standard form factors, manufacturing, and packaging flows used by major accelerator and switch vendors. The company said the technology is intended to unlock performance gains and reduce workload costs in power-constrained AI environments.
Neuberger Berman will take a board observer role as part of the investment. The participation of MediaTek and Alchip Technologies further aligns Ayar Labs with key custom ASIC design ecosystem partners.
KEY QUOTES
“AI infrastructure is hitting a power wall driven by interconnect inefficiency. As bandwidth demands explode, copper becomes the bottleneck — consuming too much power and limiting AI throughput per watt and per dollar. Co-packaged optics overcomes these barriers, enabling thousands of GPUs to operate as a unified system. This funding fuels our ability to meet the demands of hyperscale AI.”
Mark Wade, CEO and Co-Founder, Ayar Labs
“Today’s AI infrastructure buildout is one of the largest capital deployment opportunities of our generation, and data center interconnect has quickly emerged as the most critical bottleneck. Ayar Labs’ execution against key customer milestones is driving strong market conviction in its technology leadership. We believe that both ongoing and new strategic investments from industry leaders in this round reinforce this momentum. With a production-ready scale-up co-packaged optics solution and deep ecosystem integration, we are excited to lead this round and help accelerate the paradigm shift taking place in AI infrastructure.”
Gabe Cahill, Managing Director, Neuberger Berman
